Wednesday, 6 July 2011

Fascinating fortunes: Our rich list obsession

The new Forbes list of the world's richest people shows that there are more than 1,200 billionaires across the globe. With Russian and China boasting more than 100 billionaires each, a level previously only reached by the United States, is the western obsession with ranking wealth spreading?

It is a rather recent phenomenon: an obsession with just how wealthy rich people are.

Americans seem to have become fascinated by wealth first; US newspapers produced rich lists from public filings at least 90 years ago, maybe much longer.

But the rich list obsession got a great push from the American magazine Forbes, in 1982.

Forbes was very much a family concern, started by the once impoverished Scottish immigrant BC Forbes in 1917.

Forbes was obsessed with success in business. Success was charted by net worth, somebody's personal assets minus their borrowings.

BC Forbes' son, the flamboyant Malcolm, decided that other people wanted to know how rich other people were. Maybe even the rich wanted to know. Forbes sleuths pieced the evidence together and came out with a figure.

Click to playAdvertisementWatch: Steve Forbes on the spread of wealthThen they drew up a score card, the Forbes 400. It was an obvious counter play to the rival magazine Fortune's list of the top US companies, the Fortune 500, started 27 years earlier in 1955.

Correct or not, the Forbes 400 rich list tended to stick. Different publications came up with completely different results, suggesting rich list compiling was very much an art not a science (a bit like auditing and accounting, really).

But the huge variations did not appear to undermine the attractions of reading lists of rich people, and speculating about them in a league table of wealth in which participants moved up or down year after year, as events, mistakes and the passing scene impacted on their incomes, outgoings and perceived wealth.

Inherited wealth

When they died, their fortunes were divided up. Many of the American participants in the Forbes Rich List owe their position solely to inheritance: 74 of the 400 in 2009.

Continue reading the main story Forbes' top five billionaires

Carlos Slim $74bn (£45bn) America Movil, telecoms

Bill Gates $56bn (£34bn) Microsoft, software

Warren Buffett $50bn (£30bn) Berkshire Hathaway, investment

Bernard Arnault $41bn (£25bn) LVMH, luxury goods

Larry Ellison $39.5bn (£24bn) Oracle, software

Source: ForbesIn some cases a fortune is big enough to create several family members in the List, like the Walton inheritors of the Walmart billions.

Inherited wealth has not yet had time to happen in China. But the Forbes Rich List idea has grown internationally over the years, and it does not seem to lose its potency.

Most countries now seem to have at least one list of the richest, the most powerful, the smartest, and circulations rise whenever the lists are published.

Readers love thinking about wealth, matching the money to the personal histories of people they do not know and will never meet.

The obvious unspoken questions are "Are they beautiful? Are they happy? What did they sacrifice to get on the list?"

Meanwhile, the global rich have lost their reticence, if they ever had such a thing. What use is wealth if you cannot flaunt it?

Sales of luxury goods are booming all over the world. Hence the extraordinary boom in luxury watches, wealth you can wear on your wrist and flourish to others whenever you need to know the time.

The new breed of Chinese private entrepreneurs is in a bit of a bind when it comes to proclaiming their wealth.

'Tall poppy syndrome'

They are proud, very proud of what they have achieved.

But in a controlling state such as China, they can never be sure that flaunting their wealth will not attract the attention of the authorities, nervous about private power though its development has been one of the key things propelling the Chinese economy over the past 30 years.

Australians call it the "tall poppy syndrome", the way that successful people are pulled back down to earth by jealousy or official action, often from the tax man.

Continue reading the main story Find out more

Global Business is broadcast on the BBC World Service from Saturday 23 April 2011.

Listen via the BBC iPlayerOr download the podcastIt must have changed by now, but for some recent years in China the most popular car for the new rich was the American Buick, a big car but not a flashy brand; a defensive stance about showing your wealth.

It has taken an Old Etonian Englishman with a Dutch name, Rupert Hoogewerf, to grasp the Chinese Rich list opportunity.

A qualified chartered accountant with a degree in Chinese and Japanese, Rupert Hoogewerf launched his list of China's richest people (by his own estimation) in 1999.

That has grown into Hurun Report, a publishing empire which includes lots of China lists and magazines.

It gives some fascinating insights into China's rapid business changes, and the emergence of a new entrepreneurial elite.

Hurun is the Chinese transliteration of Hoogewerf, by the way.

Like BC Forbes, it is quite a good idea to get your name on the front of the magazine, and to use it to make a small fortune out of other people's great big fortunes.